Comcast (CMCSA) Last Update 11/9/22
Related: T VZ DISH
% of Stock Price
Revenue
Gross Profits
Free Cash Flow
Comcast
STOCK PRICE
DIVISION
% of STOCK PRICE
Media
9.9%
$6.46
Sky
5.7%
$3.69
Net Debt
29.4% $19.14
TOTAL
100%
$65.01
$45.87
Yours
Trefis Price
N/A
$35.65
Market
 
Top Drivers for Period
Key Drivers
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TREFIS Analysis


Trefis Report
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RECENT NEWS AND ANALYSIS

Potential upside & downside to trefis price

Comcast Company

VALUATION HIGHLIGHTS

  1. Cable Communications constitute 76% of the Trefis price estimate for Comcast's stock.
  2. Media constitutes 10% of the Trefis price estimate for Comcast's stock.
  3. Studio And Theme Park constitutes 9% of the Trefis price estimate for Comcast's stock.

WHAT HAS CHANGED?

Q3 2022 Earnings

Comcast reported a better-than-expected set of Q2 2022 earnings. Revenue fell by about 1.5% versus last year to $29.85 billion due to a tough comparison for the company's media division, which broadcast the Olympics in the year-ago quarter. However, adjusted net income rose by about 4.5% to $4.22 billion, driven partly by the company's recent price hikes. Comcast's broadband business added a better-than-expected 14,000 subscribers over the quarter, although growth has cooled considerably from levels seen through the Covid-19 pandemic.

Comcast's Streaming Service

Comcast's direct-to-consumer streaming service Peacock was launched in July 2020, offering both ad-supported and ad-free subscription options. The business has been gaining traction, with its subscriber base rising from around 9 million as of December 2021 to 15 million as of September 2022.

NBCUniversal has become an important growth driver for Comcast

NBCUniversal constitutes approximately 30% of Comcast’s total revenues in 2021 and includes the cable and broadcasting networks, theme parks, and movie businesses. NBCUniversal’s theme park business is trending well following the easing of Covid-19 restrictions and is generating stable cash flow for the company, with the advertising and distribution operations also driving growth. Consequently, we believe that NBCUniversal will continue to perform exceedingly well for Comcast in the coming quarters.

BUSINESS SUMMARY

Comcast is a global media and technology company with three broad operating segments. (1) Comcast Cable: one of the largest providers of high-speed internet, video, and voice services in the United States. (2) NBCUniversal: Operates cable networks, broadcast television, filmed entertainment, and theme parks.(3) Sky: Based in Europe, Sky operates video, high-speed internet, voice, and wireless phone services and also runs the Sky News broadcast network and Sky Sports networks.

POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE

Below are key drivers of Comcast's value that present opportunities for upside or downside to the current Trefis price estimate for Comcast:

Cable Communications EBITDA Margin: Comcast's cable division's EBITDA margins stood at about 44% in 2021. Trefis expects the metric to grow slightly to about 45% by the end of our forecast period. However, if Comcast can boost margins to around 50%, driven by higher-priced broadband plans and better cost management, there could be a 5% upside to our price estimate.

Comcast Broadband Subscriber Fees: We estimate this figure to grow from $60 levels in 2021 to $75 by the end of our forecast period. However, there could be more than a 10% upside to our price estimate if this figure were north of $95 in the coming years. On the other hand, there could be a downside of around 5% to our price estimate if the company cannot raise the prices amid increased competition in the broadband market.

For additional details, select a driver above or select a division from the interactive Trefis split for Comcast at the top of the page.

SOURCES OF VALUE

We believe that Comcast's Cable Communications business is the biggest driver of its valuation for a couple of reasons.

High number of subscribers

Comcast had around 17.5 million pay-TV subscribers and 32 million broadband subscribers as of 2021. Going forward, we expect broadband subscribers to continue to grow while the pay-TV subscriber base will shrink in the long term.

High average monthly fees per subscriber

There is quite a difference between fees per subscriber for Comcast's pay-TV and broadband subscribers. Comcast is making, on average, $110 per month from its pay-TV subscribers compared with $60 per month for broadband subscribers.

KEY TRENDS

Comcast takes streaming more seriously

With pay-TV services facing competition from online streaming companies such as Netflix, many cable TV users are cutting the cord. However, Comcast has been taking steps to cater to this growing market, forging a deal to distribute Netflix on its Xfinity platforms while also focusing on its streaming video service - Peacock - which launched in 2020. The company also offers its Flex streaming box for free to cable customers.

Universal studio's focus on franchises

Comcast's Universal movie studio has been increasingly focusing on movie franchises with larger audiences and greater brand recognition, making them more likely to succeed than standalone films. Some popular franchises from the company include Fast and Furious, Despicable Me, and Fifty Shades. Universal also successfully revived the fan-favorite Jurassic Park franchise. The studio also has other relatively lower-grossing franchise properties such as Pitch Perfect, Jason Bourne, Neighbors, Ted, The Purge, Snow White and the Huntsman, etc.

NBCU is expanding in China with a massive theme park project in Beijing

NBCUniversal and Beijing Shouhuan Cultural Tourism Investment Co. (a consortium of four state-owned companies) opened a new Universal theme park in Beijing in September 2021. The park is spread over a 300-acres and will eventually expand to 1,000 acres. The property also includes two hotels. Amusement parks in China are among the most attended in the world, which could help drive NBCUniversal's theme park business.